Tomorrow is the long-awaited date for the Initial Public Offering of Ferrari stock on the New York Stock Exchange under the ticker symbol RACE. The stock will open at $52 per share and experts expect the stock’s value to quickly rise as institutional investors vie for large lots of the stock. So private investors might want to wait a while for the stock to settle before adding it to their portfolio.
While automotive stocks are extremely volatile right now – VW suffered greatly after its diesel scandal, Tesla is wavering today after Consumer Reports pulled its “Recommended” rating, and GM continues to struggle under continued recalls – Ferrari should hold its value for the foreseeable future.
Long term prospects for Ferrari are good as the company’s brand is highly regarded. There is a lot of growth potential in both existing and emerging markets for cars with some of the highest margins in the industry. And Ferrari has indicated they will raise production caps to increase revenue and profits while still keeping the total number of vehicles produced well below demand.
So while we won’t be calling our brokers to add Ferrari to our portfolio tomorrow, we probably will in the future. After all, owning a piece of the company is the next best thing to owning a one of Ferrari’s cars.